February 8, 2019 - Written by John Cameron
STORY LINK Pound to New Zealand Dollar Exchange Rate Steadies as Trump China Comments Cause Global Risk Surge
The Pound Sterling to New Zealand Dollar exchange rate has traded within a narrow range today (Friday, 8th Feb) and is currently trading around NZ$1.9211 on the inter-bank market.
Sterling (GBP) is rangebound against the New Zealand Dollar (NZD) after US President Donald Trump announced that he would delay trade talks with Chinese President Xi Jinping ahead of the looming deadline of 1 March.
Larry Kudlow, the White House Economic Advisor, stated that there was a ‘pretty sizable distance to go’ before the US and China agreed on a deal, however Donald Trump is ‘optimistic with respect to a potential trade deal’, according to Kudlow.
This has caused some concern for ‘Kiwi’ traders, and with the ‘trade truce’ due to end on the 1 March, worries are continuing to mount that the US and China will fail to agree on a deal.
The New Zealand Dollar is sensitive to US-China trade developments, and with the increased risk of the possibility of trade tensions once again erupting between the two nations, the ‘Kiwi’ has remained relatively subdued.
The New Zealand Dollar has also remained steady today, and with Chinese banks closed for the Chinese New Year, no economic data from New Zealand’s biggest trading partner has left the ‘Kiwi’ relatively stable.
There has also been no notable New Zealand economic data for the past two days, similarly there are no notable UK economic data releases today, with most Sterling traders focusing on Brexit developments instead.
GBP/NZD Exchange Rate Steadies as Northern Irish Backstop deemed ‘Non-Negotiable’
Meanwhile, Prime Minister Theresa May met with the Irish Prime Minister, Leo Varadkar, in Dublin today to discuss the Northern Irish backstop and other aspects relating to Brexit.
Pound traders, however, have remained cautious as both the EU and Varadkar have remained resolutely stubborn on the issue of the Northern Irish backstop, with the Brexit co-ordinator for the European Parliament, Guy Verhofstadt, calling the backstop ‘non-negotiable’.
The Pound has remained relatively stable today after the Bank of England (BoE) announced that its interest rate would remain unmoved at 0.75% yesterday.
The Governor of the Bank of England, Mark Carney, however warned that the economy had ‘slowed because of a weaker world’ and that Brexit uncertainty was continuing to weigh on the UK economy – dampening market confidence in GBP.
GBP/NZD Outlook: Brexit Developments in Focus
GBP investors will be looking ahead to the publication of the UK GDP figures for the fourth-quarter on Monday, with any signs of an increase potentially providing some uplift for Sterling.
These will be followed by the publication of the UK manufacturing production figures for December, which are expected to increase.
Monday will also see the publication of the Chinese new loans figures for January.
These will be followed by the printing of New Zealand’s electronic card retail sales figures for January, with an increase potentially benefiting the NZD/GBP exchange rate.
The GBP/NZD exchange rate is likely to be driven by Brexit developments next week, with Theresa May attempting to develop a legally-binding UK-EU withdrawal agreement that will be passed by an increasingly divided House of Commons.
International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.
TAGS: Currency Predictions Daily Currency Updates Pound New Zealand Dollar Forecasts